EPS Growth Calculator
Calculate EPS growth rate and CAGR over multiple periods to measure company earnings trajectory. Analyze year-over-year earnings per share growth with charts.
About This Calculator
The EPS Growth Calculator helps investors and analysts measure how a company's earnings per share have grown over time. By comparing EPS values from different periods, you can assess whether a company is becoming more profitable on a per-share basis, which is a key driver of stock price appreciation.
EPS growth is calculated using two complementary metrics: Total EPS Growth measures the overall percentage change from the start to the end of the period, while EPS CAGR (Compound Annual Growth Rate) shows the average annual growth rate accounting for compounding. The formula for EPS CAGR is: ((Final EPS / Initial EPS)^(1/n) - 1) × 100, where n is the number of periods. The calculator also provides a year-by-year projected EPS breakdown at the CAGR rate.
EPS growth analysis is fundamental to value investing and growth investing strategies. Investors often use EPS growth rates to determine valuation multiples — companies with higher expected EPS growth typically command higher price-to-earnings (P/E) ratios. The PEG ratio (P/E divided by EPS growth rate) is a popular valuation metric that uses EPS growth data.
Regional Notes
India: Indian companies report EPS in INR in their annual reports following Ind AS accounting standards. BSE and NSE listed companies provide quarterly and annual EPS data. The Securities and Exchange Board of India (SEBI) mandates standardized financial reporting for all listed entities.
United States: US companies report EPS in USD in their 10-K and 10-Q filings with the SEC. Both basic EPS (net income / weighted average shares) and diluted EPS (including stock options and convertible securities) are reported. The Financial Accounting Standards Board (FASB) governs US GAAP reporting standards.
United Kingdom: UK companies report EPS in GBP in their annual reports under IFRS accounting standards. The London Stock Exchange requires listed companies to publish financial statements including EPS data. UK companies typically report both basic and diluted EPS following IAS 33 guidelines.
For accurate analysis, use diluted EPS when comparing across companies as it accounts for potential share dilution from stock options and convertible instruments. Note that extraordinary items and one-time charges can distort EPS growth — consider using adjusted or normalized EPS for trend analysis.
Frequently Asked Questions
What is EPS growth?
EPS growth refers to the percentage increase in a company's earnings per share over a specific period. It measures how much the profit attributable to each outstanding share has grown, indicating improving profitability and shareholder value creation.
How is EPS growth rate calculated?
EPS growth rate (CAGR) is calculated using the formula: ((Final EPS / Initial EPS) ^ (1 / Number of Periods) - 1) x 100. The total EPS growth is calculated as: ((Final EPS - Initial EPS) / Initial EPS) x 100.
What is a good EPS growth rate?
An EPS growth rate above 15% sustained over three or more years is generally considered excellent. Growth rates between 8-15% are considered good, while rates below 5% may indicate a mature or struggling company. The acceptable rate varies by industry and economic conditions.
What is the difference between total EPS growth and EPS CAGR?
Total EPS growth measures the overall percentage change from the initial to the final period. EPS CAGR (Compound Annual Growth Rate) shows the average annual growth rate over the period, accounting for compounding. CAGR is more useful for comparing growth across different time periods.
Can EPS growth be negative?
Yes, EPS growth can be negative, which is called EPS shrinkage. This occurs when a company's earnings decline compared to a previous period. Negative EPS growth can result from temporary factors like economic cycles, industry downturns, or company-specific challenges.
How do I find a company's EPS data?
A company's EPS data can be found in its annual report (10-K in the US) or quarterly earnings reports under the income statement. Financial websites like Yahoo Finance, Bloomberg, and Google Finance also provide historical EPS data for publicly traded companies.
Is EPS growth the same as revenue growth?
No, EPS growth and revenue growth are different. Revenue growth measures the increase in total sales, while EPS growth measures the increase in profit per share. A company can have growing revenue but declining EPS if costs rise faster than sales, or growing EPS despite flat revenue through cost cutting.
How many periods should I use for EPS growth analysis?
For meaningful EPS growth analysis, use 3-5 years of data to smooth out short-term volatility. A 5-year period provides a good balance between capturing long-term trends and remaining relevant to current business conditions. Longer periods of 10 years can reveal sustainable competitive advantages.